Some quick notes regarding Rails:
1. turn off persistent connection for the dispatch.fcgi, Ruby's fcgi interface does not support persistent FCGI connection.
2. Turn on .htacess support at both vhost and server level to make the rewrite rule in public/.htaccess work properly. You probably did not turn it on at server level.
3. Once the rewrite rule works, index.html should work properly. You can also add "index.html" as a index page for that vhost.